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Reports continue to advise that the upcoming autumn crop will be less than that of 2016. They also advise that due to the BRICS meeting in Xiamen, a major processor was forced to suspend production during September. Pricing seems to have stabilized for the present but any unexpected demand could cause this to change.

With too much rain in Southern China, there are potential reports that much of the fall crop has rotted. With limited raw material available and higher labor costs, prices have increased. We would expect this to last until the spring crop.

Reports from the harvest that began in late September indicate that there are fewer leaves and twigs available than in last year’s harvest. It is also stated that much of what will be available has already sold so prices are anticipated to increase.

Similarly to Eucalyptus, cold in southern China has caused major damage to the trees. One report indicates that the upcoming Spring crop will be 20% smaller than last year’s. Belief among our sources is inconclusive. Some believe that the traditionally larger Spring crop will ease prices and some say that a shortened Spring crop will not cover demand. Prices for these two ingredients have increased and we expect this trend to continue for several months.

Reports indicate that by the time the Fall Crop has ended in January output will be far less than expected. One report indicates that production in Guangdong Province will be 50% of normal levels. Prices are expected to firm.

Price increases of $0.02 – 0.05/kilo have been reported at the farm level. Reports also indicate a 100 ton carryover from the spring crop and a lower yield on the Autumn Crop that means higher costs. Pricing will be adjusted by the end of November and any changes are expected to be minimal.

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